The Rules of the Retail Game Have Changed

Mickey Drexler, famed Gap and J. Crew fashion genius, has found that in the digital era, the rules of retail have changed. Rather than surviving on high priced signature looks, retailers must focus on price, speed, and accessibility. Drexler told The Wall Street Journal “We became a little too elitist in our attitude.” Khadeeja Safdar reports:

Many visionaries focus on doing what they do best, even when the ground shifts beneath them. From newspapers to television, successful companies have been upended by disruptive technologies. Facebook Inc. is now the world’s largest publisher; Netflix Inc. is worth twice as much as CBS Corp.

“The incumbent leaders never see it coming,” said Clayton Christensen, the Harvard Business School professor who introduced the theory of disruptive innovation 20 years ago. “They focus on their best customers and try to provide what they need, but the customers who first defect [to new technology] are usually the least profitable.”

Mr. Drexler, known as the “merchant prince,” built some of America’s most recognizable apparel brands, including Old Navy, Banana Republic and most recently Madewell. He focused on details such as the feel of the fabric, the weight of the buttons and the plaid inside waistbands, according to former executives who worked with him at J.Crew and Gap. Higher quality allowed J.Crew to charge a premium for its casual, preppy styles.

The New York City native, who doesn’t have his own Instagram, Facebook or Twitter account, was sharing thoughts with employees on a loudspeaker—hooked up through his phone—before Twitter was launched. He paid attention to firsthand shopper feedback on frequent visits to stores long before Amazon.com Inc. was collecting user data. He was also selling clothes online before many other specialty retailers. Nearly half of J.Crew’s sales now come from the web.

But Mr. Drexler didn’t appreciate how the quality of garments could easily get lost in a sea of options online, where prices drive decisions, or how social media would give rise to disposable fashion. Online, price has more impact than the sensory qualities of clothing. “You go into a store—I love this, I love this, I love this,” he said. “You go online and you just don’t get the same sense and feel of the goods because you’re looking at a picture.”